Skip to main content

tv   BBC Newsnight  WHUT  July 17, 2011 8:00am-8:30am EDT

8:00 am
>> this is "bbc newsnight." funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. and union bank.
8:01 am
>> union bank has put its global financial strength to work for a wide of companies. what can we do for you? >> the phone hacking scandal spreads across the atlantic as the fbi begins its own investigation. this week, david cameron severed links with the murdoch's in the u.k. and there are cries for more investigation in the u.s. we speak to a senator calling for an inquiry. >> it is hard for me to understand how anybody could sanction doing some of the things they reportedly did. >> the saudi billionaire prince is news corp.'s second biggest shareholder. and we are deep in libya as the rebels opened another friend to
8:02 am
get rid of gaddafi. -- open another front to get rid of gaddafi. it has been another dramatic week for rupert murdoch's news corp.. the fbi has involved itself and says it has opened a preliminary inquiry into allegations that news corp. journalists sought to gain access to the phone records of victims of the september 11th attacks. members of congress from both parties have called for an inquiry as to whether u.s. citizens were being targeted. i spoke to senator barbara boxer, who sent a letter to the department of justice asking for a full investigation. but first, how the crisis has spread. >> rupert murdoch's troubles may have broken out in the british corner of his empire, but the contagion is spreading fast to his businesses worldwide. in his home and australia, where
8:03 am
he owns almost 150 titles, the company is checking all editorial content from the past five years. politicians are wary. >> i have been pretty shocked and disgusted to see the revelations we have seen in the united kingdom's, some of the things that have been done to intrude on people's privacy. >> more seriously, the contagion spread to murdoch's adopted home, the united states, where he is now a naturalized citizen. his holdings include the new york post, wall street journal, harper collins, twentieth century fox and the influential fox news channel, which has enabled murdoch to play something of the same political role in america that he has played in britain. >> fox is a very conservative media outlet, it takes a conservative bent and sides with republicans routinely, against the democrats. i think there has been a lot of
8:04 am
liberal anger at mr. murdoch over the years. i also think there have been liberal politicians, democrats, who have been more loath to criticize mr. murdoch in the past, or fox, for fear of having some of the kind of repercussions that british politicians were also afraid of. they do not become targets of fox news. >> in congress, concerns are growing, especially after the suggestion, still unsubstantiated, that news of the world journalists may have been hacking the phones of 9/11 victims. calls have been made to the department of justice and the securities and exchange commission to investigate the allegations. u.s. companies are banned from paying bribes to foreign officials. >> last week when the story broke, this became an
8:05 am
interesting story to americans. we found it titillating, fascinating, but it was not necessarily penetrating the consciousness of the greater american public. this week, on the other hand, we are starting to see greater american interest in the story because it could affect americans, not just people in britain. >> wall street is also becoming increasingly worried about rupert murdoch. the news corp's share price fell sharply at the beginning of this week. they're fighting a lawsuit by one group of shareholders who claimed these revelations show a culture run amok with in news corp. and a board that provides no effective review or oversight. the claim adds, throughout his tenure, murdoch has treated news corp. like a family candy jar that he rates whenever his appetites strikes. now some believe the corporation may begin to pull out of the
8:06 am
newspaper business. many doubted james murdoch will ever succeed his father as his head -- as its head. >> investors need to know that there is a capable leader. there is some question now as to whether james murdoch is that a capable leader to actually run the enterprise. the other thing shareholders need and are looking for is reassurance that advertisers are not going to flee the worst -- flee the newspaper titles. in the worst-case scenario, should you get the fleeing of advertisers there that you had here from news of the world, the only other option is to actually kill those brands in the way that news of the world was anesthetized or euthanize. -- euthanize td. >> very likely at some point there will be an entire new management team at the company. the murdoch influence, despite
8:07 am
their defacto control of ownership, is going to be removed. >> last year, murdoch was in charge of an empire worth roughly 20 billion pounds. now, events are spinning out of his control. >> senator barbara boxer joins us now from washington. thank you for joining us. you too are a foreign journalist -- were a foreign journalist before you became a senator. let's begin now with the fbi looking into the possibility that the victims of 9/11 were hacked. is this an investigation that you wanted? >> it is part of it. i teamed up with senator jay rockefeller who is chairman of the commerce committee. i am a senior member of that committee. we have jurisdiction over broadcasters and the media as a whole.
8:08 am
we rode to the securities and exchange commission and to the department of -- wrote to the securities and exchange commission and to the department of justice asking them to look specifically into the possibility that two american laws were broken. one, the foreign practices correction act and secondly, the so-called wiretap act. any american corp. has to comply with these laws. rupert murdoch decided he wanted to become an american citizen. i do not blame him. america is the greatest place in the world, i say to you. the fact of the world is, he became an american citizen. his corporation is american. he needs to obey american law. the stories coming out of europe about bribing police officials, on its face, that is not allowed under the foreign corrupt practices act. the allegations that he may have packed into families of the victims of 9/11, -- hacked into
8:09 am
families of the victims of 911, that is not 11th pick -- that is not allowed. >> at this point, those are just allegations, correct? >> absolutely. >> the hacking of funds here and the bribing of officers -- phones here and the bribing of officers here, were he to be found at fault, would that mean that his newspapers could be prosecuted in america? >> he cannot bribe officials anywhere in the world. this act was signed in the 1970's. there was concern about corporations paying of different people, and corporate america was not well thought of. jimmy carter signed this act
8:10 am
into law and we began to see a higher level of morality in our corporations. it is very important. right away, any type of bribery of officials or any of the people trying to get information, that is just not allowed. >> do you think it might be possible that you will request he appear in front of a senate committee? >> he has already appeared before the commerce committee on other matters. yes, i mean, he is an american corporation, an american citizen. depending on how this goes, i have spoken to chairman rockefeller, and it is possible we could call him. we are not ready to do that at this time, but the fbi is focused in on this. i have to say, it is hard for me to understand how anybody could sanction doing some of the things they reportedly did. when you look at that little girl's murder in your country
8:11 am
and what is reported to have happened there, the possible hacking over here, the possible hacking of phones of families who lost soldiers in afghanistan and iraq, british families, it takes my breath away. >> if indeed the executives are found guilty of involvement in any of these things, what are the sanctions that you could impose on your side of the atlantic? >> right now, many things. there are two laws that come into play. this is a public corporation. they sell shares. if they hid payments, bribery payments, from shareholders, that is a whole other civil penalty. if they hacked into phones without a warrant, that is criminal. the foreign corrupt practices
8:12 am
act could be civil or criminal. lots could happen. and the security and exchange commission has the ability to take away the license from a media corporation that breaks the law. it is too soon to say what, where and how. >> is not one criticism, of course, that it would actually sue to the democrats -- suit the democrats greatly if the fox news channel was to become emasculated. >> my goodness. if you break the law in our country, whether you are republican, democrat, liberal, conservative, moderate, if you break the law, you pay the price. that is as simple as it gets. it has nothing to do with your political persuasion. >> barbara boxer, thank you for joining us. the future of the murdoch empire is certainly more -- is
8:13 am
unquestionably more uncertain than ever before. james murdock was once heir apparent. his future is now unclear. shareholders have seen their stock fall. they have also seen the price but oner bid of b-sky-b the shelf. we spoke to the second-largest shareholder of news corp., the prince of saudi arabia. >> even by the standards of the wealth that you find here on the french riviera, the man i am about to meet is wealthy. prince saud is known as the arab
8:14 am
warren buffett. he is a nephew of the saudi king, but he says his fortune is self made. his company, kingdom holdings, is in a wide range of businesses, including the second-largest stake in the company that funds rupert murdoch's entire global media -- owns rupert murdoch's entire global media empire. rupert murdoch owns 12%. the prince owns 7%. what is more, he is far richer than rupert murdoch. rupert murdoch is said to be worth $7.5 billion. the prince is said to be worth $20 billion. i met the prince on an upper deck of his yacht.
8:15 am
>> we hope that as this thing unfolds, the truth will come out. it is very important for me and my company, who are investors in news corp., to get this in order. ethics to me are very important. >> some terribly unethical things have taken place. hacking into the telephone of the murdered teenager. hacking into the relatives of british soldiers who have died in action. these are awful things. >> these are the problems of one newspaper, not of news corp.. the news of the world was shut down. unfortunately, the tactics used by tabloid newspapers are used by other tabloid newspapers also. >> james murdoch is in an uncomfortable position. either he knew what was going
8:16 am
on and did not tell authorities, in which case he is perhaps liable for criminal prosecution, or he did know, and as a manager, he looks like he was not in control of his own organization. either way, it is not good. >> we should wait for the parliament and the prime minister. why should we preempt what they are going to come up with? >> one issue for you as a major investor is how the contagion from this crisis has spread. there are calls for a senate inquiry in the u.s., criticism of murdoch in newspapers across the entire world. this is a really serious problem for you as an investor. >> i hope this matter does not get over-publicized. politicians in the united states would like to take revenge on mr. murdoch's conglomerate.
8:17 am
i think this should not be over- publicized. i think there should be time to investigate the whole process, to come up with findings, and then to see how high this thing went up. >> what do you think as a major shareholder? you are the second-biggest shareholder after rupert monica himself. what have you been set -- rupert murdoch himself. what have you been saying? >> i told the murdoch's that they have to cooperate fully. they are going to cooperate with the commission. they seek to get the truth out. they know exactly my high ethics when it comes to business. frankly, from my dealings with them, i have seen nothing but high ethics in the past few years. >> b-sky-b was a key part of
8:18 am
their strategy, was it not? >> it has been held up, but it is not dead forever. >> you think they may come back and make a bid again? >> i cannot speak for rupert murdoch. his bid has been withdrawn. the minimum weight time to come back is six months. >> libyan rebel leaders visited brussels this week in an attempt to shore up legitimacy on the international stage. not the best timing for accusations to emerge of looting and arson by rebel forces. even with the support of nato, victories have been theirs for many weeks. rebels now feel they -- have been scarce for many weeks.
8:19 am
rebels are now speaking about pushing on toward tripoli. >> we are alliance, they chant. these are the men that rebels say will strike the final blow against gaddafi, liberating the capital. most are from tripoli. they fled at the start of the uprising. their commanders are telling them it could only be a matter of weeks before they return. their families are still there, so they hide their faces. they may look a bit sinister, but beneath the masks, they are doctors, lawyers, teachers. it is as if the working class went to war. [singing] they're fighting for high
8:20 am
ideals. these do not seen the kind of men to except a compromise with the regime. the accept a compromise with the regime. their hopes lie here in the mountains. tripoli is a mere 60 miles away. just months ago, rebel-held towns were under siege, battered by the loyalists heavy artillery. just a couple of big towns now stand between them and the road to tripoli. this is not a regular army. it often seems like quite a sleepy little war. >> rebels do seem to have some forward momentum at this part of
8:21 am
the front line at least. they need weapons, ammunition and money. for ordinary fighters, the focus is on the next battle. if all goes to plan, this will be in the small town nearby. the rebels some and the tribal leader there. they told him he had 48 hours to evacuate civilians before the assault. the rebels are confident. they believe things are going their way. at the first sound of gun power, they complacently assure us it is just their own a man -- their own and having a bit of target practice. it was in fact government
8:22 am
loyalists in a surprise attack. it is a nasty shock for inexperienced troops. a spot vehicles moving towards them. they realize -- they spot vehicles moving towards them. they realize they're being surrounded. with frightening rapidity, the rebels front line collapses. we run. so does everyone else. they held a few miles down the road. -- halt a few miles down the road. there is an argument as to whether or not to go back and fight. >> we only have one case of bullets. what can we do with that?
8:23 am
>> other towns have plenty of ammunition but keep it for themselves come up a sign of some disunity beneath the revolutionary -- themselves, a sign of some disunity beneath the revolutionary slogans. that evening the, the rebels counterattack. hundreds of men are pushed back. in the end, they lose all the ground they had one in the morning. finally, there outside the town once again. in getting this far, the rebels had shown fighting spirit. that, more than skills, may determine the outcome of this conflict. looking at the battlefield, colonel gaddafi might think he can hang on.
8:24 am
is it time to talk to the regime? a plane carrying rebel ministers from benghazi lands on a mountain road converted into an airstrip. >> gaddafi and his family have to leave unconditionally. i do not know if any view in the cabinet that i represent believes we are ready to negotiate with gaddafi. the key issue is that we need the military to change. the reason that everybody is clamoring for a political solution is because so far on the military side we have not done as well. in less we do that -- unless we do that, the rest of the world will need to find a solution to this conflict.
8:25 am
>> the rebels have not met all of the international community's expectations. there are reports of looting in the last place they captured. when rebels levin, government supporters flee, terrified. -- when rebels moved in, government supporters lee, terrified. they leave -- when rebels move in, government supporters fulle, terrified. they leave ghost towns. they are accused of abusing prisoners. people who stayed in the towns were working with the army, one rebel said. the houses they rob were once the army used. people who were beaten were working with the gaddafi brigades.
8:26 am
the rebels would still like us to think of them as they think of themselves, the good guys. these men were crushed by colonel gaddafi pose a tanks -- took tos tanks, so they the hills. >> i am a senior engineer. but now i am holding guns and fighting. even if this were take a long time, we're not going back. -- this war takes a long time, we're not going back. >> the fighters have no doubt of their eventual victory. their tanks will roll into tripoli soon, they say. reportedly sent his best army units to stop these rebels.
8:27 am
there in the last big town on the way to the capital. fate and that of the libyan revolution could be decided here. >> that is all for this week. from all of us, goodbye. >> funding for this presentation is made possible by the freeman foundation of n york, stowe, vermont, and honolulu. newman's own foundation. and union bank. >> union bank has put its global
8:28 am
expertise toork for wide range ofm fro from small businesses to major corporations. what can we do for you?
8:29 am